Budget caps - who does it benefit?

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raymondu999
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Budget caps - who does it benefit?

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With the upcoming budgetary restrictions coming into play over the next couple of years, who do you think it benefits, and who do you think it hurts?

These are my personal thoughts -

I think Ferrari are a loser in this - they are used to “throwing money at a problem” - which will no longwr be a viablw solution for them.

McLaren has adjusted from the same money-Almost-no-object mentality to more of a midfield spending level and I think this new experience will help them adapt to the budgeted era.

Force India have always known to be the best-value-deal operators. Isn’t there a stat that (barring their transition 2018 year) that team has acquired most points per dollar spent?

Mercedes has a big budget in F1 too but I think at this point the organisation is more agile, more adaptable, than Ferrari. I think they may suffer a teething period into the new age but adapt well after.

Thoughts?
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Mclarensenna
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Re: Budget caps - who does it benefit?

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raymondu999 wrote:
Sat May 16, 2020 4:29 am
With the upcoming budgetary restrictions coming into play over the next couple of years, who do you think it benefits, and who do you think it hurts?

These are my personal thoughts -

I think Ferrari are a loser in this - they are used to “throwing money at a problem” - which will no longwr be a viablw solution for them.

McLaren has adjusted from the same money-Almost-no-object mentality to more of a midfield spending level and I think this new experience will help them adapt to the budgeted era.

Force India have always known to be the best-value-deal operators. Isn’t there a stat that (barring their transition 2018 year) that team has acquired most points per dollar spent?

Mercedes has a big budget in F1 too but I think at this point the organisation is more agile, more adaptable, than Ferrari. I think they may suffer a teething period into the new age but adapt well after.

Thoughts?
Yes the theory is that it will hurt the big 3 spending over the budget cap for years and help the other 7 who have generally been spending near or below the budget cap in recent years. But who knows how effective it will work in reality when we hear all this talk about creative accounting. Time will tell exactly but it should give us much closer racing regardless i would think :D

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raymondu999
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Re: Budget caps - who does it benefit?

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Yes. In theory it should. Would be very interesting because it’s then a game of getting most value for your buck.

I think McLaren with James Key who has shot well above his budget’s weight in the past - and FIndia who have such a reputation are in pound seats
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Sevach
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Re: Budget caps - who does it benefit?

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I was about to create a new thread but i think this goes well here.
https://www.motorsport.com/f1/news/f1-t ... s/4795544/

In addition to a decreasing budget cap an aero handicap system being implemented (still quite unclear, but less windtunnel/CFD time if you are out in front) not sure how i feel about this.
Also not sure if there's gonna be any difference in budget for factory teams and teams that buy their engines, is engine costs included for customers? How will factory teams develop engine and chassis with the same budget?
Last edited by Sevach on Sat May 23, 2020 4:29 pm, edited 1 time in total.

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Re: Budget caps - who does it benefit?

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Sevach wrote:
Sat May 23, 2020 2:35 pm

Also not sure if there's gonna be any difference in budget for factory teams and teams that buy their engines, is engine costs included for customers? How do factory teams develop engine and chassis with the same budget?
There is a scheme whereby a team that buys in parts from another team has a chunk of their budget removed. So they can't go and buy, for example, the whole rear end from Mercedes for $5m and have $5m more to spend on other stuff than the teams who spend $10m on their own rear end designs. If that makes sense.

Apparently there will be a formula that reduces the teams available budget for each items they buy in. I'd assume that engines will be included in that formula. It wouldn't be fair otherwise.
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Sevach
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Re: Budget caps - who does it benefit?

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That makes sense.

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Re: Budget caps - who does it benefit?

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The gap of 145 million for a 21 race season. If season includes more than 21 races, an additional 1 million per race, if season have less than 21 races, less 1 million per race. covers expenditure that relates to car performance. It excludes engine manufacturing. The cost of purchasing a customer engine supply deal – which has been capped at Euro 15m/season. As well as drivers salaries. Marketing costs. The salaries of the team’s 3 highest-paid employees (aside from the drivers). All corporate income tax and other non-F1 activities. Property cost, such as factory. Employees bonus cost and fees to enter the championship and purchase of super licence. As well as flight and hotel costs for race and testing travel.

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RZS10
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Re: Budget caps - who does it benefit?

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Sevach wrote:
Sat May 23, 2020 2:35 pm
In addition to a decreasing budget cap an aero handicap system being implemented (still quite unclear, but less windtunnel/CFD time if you are out in front) not sure how i feel about this.
This is the dumbest idea i've seen in regards to F1 rules recently - unless there's huge gaps between WCC positions in price money i could see teams throw races towards the end of the season in order to gain an advantage.

It's funny how desperately they want to change the pecking order in F1

If i understand correctly they can all develop their 2022 cars without limits (apart from the ridiculously low budget cap) during 2021 and then in 2022 the winner of 2021 will only get 90% aero dev.hours, 5th gets 100%, last gets 112.5% for their 2023 cars, afterwards it's just 70% for the WCC, 7th will get the full time and last 115% - i seriously don't understand why the teams voted for this nonsense.

edited out a typo and cleaned up the language i used
Last edited by RZS10 on Sun May 24, 2020 11:08 pm, edited 1 time in total.

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Re: Budget caps - who does it benefit?

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RZS10 wrote:
Sat May 23, 2020 11:42 pm
This is the dumbest garbage i've seen in regards to F1 rules recently... unless there'y huge gaps between WCC positions in regards to price money i could see teams throw races towards the end of the season in order to gain an advantage ... it's funny how desperately they want to change the pecking order in F1

If i understand correctly they can all develop their 2022 cars without limits (apart from the ridiculously low budget cap) during 2021 ... and then in 2022 the winner of 2021 will only get 90% aero dev. hours, 5th gets 100%, last gets 112.5% for their 2023 cars ... afterwards it's just 70% for the WCC, 7th will get the full time and last 115% - i seriously don't understand why the teams voted for this nonsense
Agreed, I'd need to actually see a proper draft of what's planned to fully gauge my level of indignation - but the whole point of the budget cap is to bring the teams onto a level playing-field, why then handicap teams for doing well?!? At least allow the budget cap a few years to see how it works.
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Re: Budget caps - who does it benefit?

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jjn9128 wrote:
Sun May 24, 2020 10:44 am
RZS10 wrote:
Sat May 23, 2020 11:42 pm
This is the dumbest garbage i've seen in regards to F1 rules recently... unless there'y huge gaps between WCC positions in regards to price money i could see teams throw races towards the end of the season in order to gain an advantage ... it's funny how desperately they want to change the pecking order in F1

If i understand correctly they can all develop their 2022 cars without limits (apart from the ridiculously low budget cap) during 2021 ... and then in 2022 the winner of 2021 will only get 90% aero dev. hours, 5th gets 100%, last gets 112.5% for their 2023 cars ... afterwards it's just 70% for the WCC, 7th will get the full time and last 115% - i seriously don't understand why the teams voted for this nonsense
Agreed, I'd need to actually see a proper draft of what's planned to fully gauge my level of indignation - but the whole point of the budget cap is to bring the teams onto a level playing-field, why then handicap teams for doing well?!? At least allow the budget cap a few years to see how it works.
Is the budget cap to bring teams together? Or is it a measure to make the sport more sustainable and open up the the possibility to get new partnerships? And, at the end, by cutting expenses, generate more profit.

For teams, RedBull is an obvious one. With two teams they could share more services on and off trackside to reduce costs.

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Holm86
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Re: Budget caps - who does it benefit?

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I like the budget cap, just as I like the fuel flow cap.

I just had hopes they would lossen other restrictions then.

If there is a budget cap, why do FIA need to restrict CFD hours, testing etc. Now they have a fixed budget, so let the teams decide what to spend that budget on ....

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Re: Budget caps - who does it benefit?

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FIA OFFICIALLY APPROVES MAJOR F1 RULES OVERHAUL
Edd Straw wrote:The FIA World Motor Sport Council has ratified Formula 1’s new regulations, including the reduced $145m cost cap for 2021, limitations to power unit upgrades and a sliding scale for aerodynamic testing.

The changes, introduced in response to the financial problems caused by the COVID-19 pandemic, were approved unanimously in an e-vote of the WMSC.

As expected, the reduction in the 2021 cost cap from the originally-planned $175m to $145m has been approved, along with the reduction to $140m in 2022 and $135m for 2023-25.

The FIA has also defined the notional values for transferable components to ensure teams do not benefit from advantageous deals in relation to the cost cap when acquiring such components, while still preventing smaller teams from establishing the ability to design, develop and manufacture such components.
The FIA also states this will prevent project “flipping”, whereby a small team designs and supplies a larger one with components for a cost cap advantage by setting a notional price.

The rules forcing teams to carry their 2020 cars over into 2021 is also enshrined in an extensive list of components that are frozen, including the chassis and gearbox as well as mechanical components and impact structures.

To allow some modifications, with McLaren in particular needing to make changes to adapt from Renault to Mercedes engines, a token system has been created to allow a limited number of tweaks. Related to this is a limit on the number of power unit upgrades in 2020.

Rules simplifying the floor ahead of the rear tyres to moderate the increase in downforce next year have likewise been improved, which also modify the plan-view trim.

The minimum weight is also increased by 3kg to 749kg amid concerns about costly materials being used for savings.

The reduction in permitted aerodynamic testing (ATR) and the introduction of power unit test bench restrictions have been approved.

For 2021, there is a further reduction in testing as well as the introduction of a weighted allowance for windtunnel/CFD testing that favours teams in reverse order of championship position.

The team finishing last in the championship will be allowed 112.5% of the ATR, dropping in 2.5% increments for each position to give the top team 90% of the maximum. This is set to be increased to 5% steps for 2022-2025, although this has not been confirmed by the FIA yet.

On the engine side, a limit on the number of new specifications of major engine components that can be introduced each season has been approved, alongside new dyno restrictions for 2020.

Changes to the sporting regulations to allow behind-closed doors races to be run have also been approved, along with various provisions to allow race weekends to be tweaked.

Events can now either be designated “closed” or “open”, with different restrictions on personnel in the paddock depending on whether spectators attend.
Tyre testing during Free Practice 2 is now possible in case Pirelli needs to trial a new specification tyres, and there is an allowance to extend the use of the first set of tyres used in P1 if FP1 is wet.

Changes have been made for 2022 covering the personnel curfew, restricted-number components, scrutineering and parc ferme. These are connected to the 2022 technical regulations.

There have been some detail changes to the financial regulations related to what is exempted from the budget cap.

This includes raising the year-end bonus exclusion cap for exceptional results from $10m to $12m and also includes related taxes.

Costs for staff entertainment that are excluded are capped at $1m, while various schemes for employee well-being – medical programmes such as vaccinations, eye tests and hearing tests – are also exempt.

Various other exemptions have also been added, including sustainability costs for environmental initiatives, projects undertaken to assist the FIA, parental leave salary costs and sick leave/long-term salary costs.
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914hald
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Re: Budget caps - who does it benefit?

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Token system :lol:
How did that go last time with engine token system? Mercedes got an even bigger advantage.

Im afraid it will cripple Mclarens progress with integrating Merc power unit properly, and fixing gremlins.

And what about freezing dev. From 20/21, if a team makes a dog of a car for 2020, and is not able to rectify anything for 2021 (ex Haas tyre problem). Will it not force teams out of F1?

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Re: Budget caps - who does it benefit?

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914hald wrote:
Wed May 27, 2020 9:59 pm
Token system :lol:
How did that go last time with engine token system? Mercedes got an even bigger advantage.

Im afraid it will cripple Mclarens progress with integrating Merc power unit properly, and fixing gremlins.

And what about freezing dev. From 20/21, if a team makes a dog of a car for 2020, and is not able to rectify anything for 2021 (ex Haas tyre problem). Will it not force teams out of F1?
Wrong, the token system did not help Mercedes, it held them back the most. Ferrari had the biggest jump in engine performance from 2014 to 2015 nd that was under the token system. What the token system did was favor large changes and discourage a large amount of small changes, that is exactly the conditions necessary to encourage those behind to catch up more quickly.

If anything increased Mercedes lead, it was in the ever intensifying reliability requirements. From 5 PUs, to 4 then to 3 per season, that affected Renault and Honda the most.

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Re: Budget caps - who does it benefit?

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yeah let’s keep stripping F1 of its core elements, this is the most bs thing they have invented

I wonder when someone will come up with a ”legacy” grand prix series with proper sounding engines, no halo, grid girls and all that tobacco sponsorships.